Equity Exchange Strengthens Fuel Cell Partnership

[] FuelCell Energy and Versa Power Systems (VPS) have strengthened their research partnership for the development of solid oxide fuel cells (SOFC) through the sale of company stock. FuelCell Energy will increase its stock share in VPS from 16 percent to 42 percent by selling the company’s core assets of their Canadian SOFC operations in exchange for $10 million of equity in VPS. The closing is expected to take place on November 1, 2004, and VPS plans to establish its permanent U.S. location in the greater Denver metropolitan area. Consolidating SOFC technology development into a single entity provides a greater opportunity to commercialize SOFC products under the U.S. Department of Energy’s (DOE) 10-year, $139 million Solid State Energy Conversion Alliance (SECA) Program. VPS technology includes a patented planar SOFC system and process that uses a unique cell configuration and components designed to enable operation at much lower temperature with increased power density. FuelCell Energy joined the VPS team in 2002 to pursue the DOE’s SECA Program. In 2003, the DOE selected FuelCell Energy as the prime contractor for the cost-shared SECA program, with Versa as a sub-contractor. The $24 million, three-year Phase I award was finalized in September 2004.